Paperback | October 22, 2002

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Advance praise for The GigaLaw Guide to Internet Law

“I read this book from cover to cover. The examples of case law are of enormous illustrative value. Some of them will raise your blood pressure (well, mine went up several notches, anyway). Well worth the time to read!” —Vint Cerf, chairman, Internet Corporation for Assigned Names and Numbers (ICANN)

“Doug Isenberg pulls off the toughest hat trick in legal writing—he and his contributing authors map out the legal landscape of cyberspace in language accessible and friendly to lay readers, providing a comprehensive guide for lawyers who want to gain a quick grasp of cyberlaw, and they do all this with scholarly care for accuracy and precision.” —Mike Godwin, author of Cyber Rights: Defending Free Speech in the Digital Age

“A treasure trove of information that is a relief to find, a pleasure to read, and a snap to apply to dozens of your most pressing Internet legal questions.”—Carol Darr, director of the Institute for Politics, Democracy and the Internet

“Doug Isenberg is the authority on all issues regarding Internet law. His insight is exceptional, his experience unsurpassed. This book is both a reference work and a bible, enlightening and showing the way—a quintessential, all-encompassing work for both the novice and the veteran.” —Marc Adler, chairman and CEO, Macquarium Intelligent Communications

Doug Isenberg is an attorney and the founder of GigaLaw.com, an award-winning website about Internet law. He writes regularly as a columnist for The Wall Street Journal Online and CNET News.com and has represented numerous high-tech and Internet clients.

For more information about The GigaLaw Guide to Internet Law, visit: http://GigaLaw.com/guide

About The Author

Doug Isenberg is an attorney and the founder of GigaLaw.com, an award-winning website about Internet law. He writes regularly as a columnist for The Wall Street Journal Online and CNET News.com and has represented numerous high-tech and Internet clients.

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CHAPTER ONECase Study: An Introduction to Copyright on the Internet, Playboy v. SanfilippoPlayboy Enterprises, Inc.—yes, that Playboy—is one of the more active participants in Internet law, filing numerous lawsuits against people and companies that use the well-known adult entertainment publisher’s intellectual property in cyberspace without obtaining permission. Intellectual property includes copyrights (such as photographs of nude models) and trademarks (such as the “Playboy” and “Playmate” names); clearly, Playboy has a lot to protect online.There’s no denying that, on the Internet, the sex industry is quite popular. And in many ways the sex industry has been at the forefront of important Internet developments, including online payment systems, affiliate programs, innovative advertising techniques, and more. Playboy is among the tamer players in the online adult world, but its name is certainly among the best known, and it has a large library of high-quality content—which is important for the success of any publisher, particularly on the Web. But popularity has a downside, too. While imitation may be the greatest form of flattery, Playboy (like other publishers) is not in business to give away its content for free. So, when individuals and other companies have copied Playboy’s photos for their own websites—either by scanning images from the printed Playboy magazine or by copying images from Playboy’s site—Playboy has not hesitated to enforce its rights.One case in particular is especially interesting and enlightening and serves as a great introduction to the issue of copyright law and the Internet. The following facts are based on an opinion written by a federal judge in California and Playboy’s allegations in a case decided in 1998.1In the case, Playboy v. Sanfilippo, Playboy filed a lawsuit against Francesco Sanfilippo and his company, Five Senses, for copyright infringement. According to Playboy, Sanfilippo operated a website through which he provided and sold access to thousands of copyrighted photographs owned by Playboy. Sanfilippo’s website, like many adult sites with pornographic content, was divided into public and private sections. The public, or free, section advertised images available in the private area, which was accessible to those who bought a password from Sanfilippo.Playboy said it sent Sanfilippo a “cease and desist” letter in October 1996. These letters are often sent by copyright owners or their lawyers to people or companies who they believe have committed copyright infringement. The letters, sometimes known as “demand letters,” typically inform a person or company that it is committing copyright infringement and demand that the action come to an immediate stop. Sending a cease and desist letter is usually, but not always, a wise precursor to filing a lawsuit, because doing so often scares the recipient into complying without incurring the costs, angst, and uncertainty of courtroom litigation.Two days later, Playboy’s attorney sent another demand letter to Sanfilippo. According to Playboy, Sanfilippo immediately acknowledged that some of the images on his website were scanned directly from Playboy’s magazine; he did not dispute that Playboy owned the copyright in the images; and he agreed to promptly remove them from his site. However, Sanfilippo did not do so, and Playboy’s attorney later sent another cease and desist letter, after which Sanfilippo said he would remove the images within twenty-four hours—which he did not do. Instead, by February 1997, the site still displayed Playboy’s photos and even offered for sale CD-ROMs containing the pictures.Fed up with Sanfilippo’s continued defiance of Playboy’s legal demands, Playboy filed a federal lawsuit in April 1997. Playboy alleged that Sanfilippo’s website contained twenty-seven files of its images, for a total of 7,475 pictures! Playboy sought and obtained from the court a temporary restraining order and an order of seizure; within two weeks, Playboy and Sanfilippo agreed to a preliminary injunction—a court requirement that prevented Sanfilippo from using the images until the lawsuit was resolved. Playboy then filed a motion with the court asking for a “summary judgment,” a court order that there are no genuine issues of material fact to be decided in a lawsuit and that one party is entitled to judgment as a matter of law. In other words, a court will grant a summary judgment motion only in an obviously lopsided case.To prevail on a claim for copyright infringement, the court in the Sanfilippo case noted that a plaintiff must prove two things: (1) that it owns a valid copyright, and (2) that the defendant violated one of the copyright owner’s “exclusive rights” listed in the U.S. Copyright Act.2 As to the first requirement, the court found that there was no factual dispute that Playboy owned the copyright rights in the images on Sanfilippo’s website, because even he admitted as much. As to the second requirement, the court said Sanfilippo admitted copying sixteen files directly from a third-party source onto his hard drive without Playboy’s permission and that the additional eleven files were uploaded to his hard drive by someone else with Sanfilippo’s authorization. Because copying is clearly one of the exclusive rights listed in the U.S. Copyright Act (they don’t call it copyright law for nothing!), the court quickly concluded that Playboy was entitled to summary judgment for the 7,475 images.The court then turned to the issue of damages—that is, how much money Sanfilippo should be ordered to pay Playboy. Damages are an interesting concept in copyright law and, depending upon the facts, can serve a number of purposes: to take away any profit a defendant may have made by committing copyright infringement, to compensate a plaintiff for money he lost as a result of having his property infringed, or to punish a defendant for having broken the law. According to one provision of the U.S. Copyright Act, under certain circumstances a plaintiff is entitled to “statutory damages” for each act of infringement in an amount from $500 to $20,000, “as the court considers just.”3 And in cases where the defendant’s conduct was “willful,” that is, where he acted with knowledge that his conduct constituted copyright infringement, the court may “in its discretion” increase the damages amount to as much as $100,000 per infringement. (These figures, which applied at the time of the court’s opinion in 1998, since have been increased, as noted in Chapter 2.)Playboy argued that, with respect to nine of the twenty-seven files containing its images on Sanfilippo’s site, Sanfilippo’s copyright infringement was willful (and Playboy was therefore entitled to the higher statutory damages) because, among other things, Sanfilippo allegedly admitted in a deposition that he knew the copying and sale of Playboy’s photos amounted to copyright infringement. The court agreed.Playboy requested that the court enter an award in the staggering amount of $285,420,000! This figure was based on 1,699 images at $100,000 each (the maximum amount for “willful” copyright infringement) and 5,776 images at $20,000 each (the maximum amount for nonwillful statutory damages). Ultimately, the court found that an award of only $500 per image was “sufficient to adequately compensate [Playboy] and deter any future infringement by [Sanfilippo]”—but that still totaled $3,737,500.The lessons from this case should be clear:• Under U.S. copyright law, it is illegal to copy someone else’s photographs, without permission, and publish them on your website. As we’ll see in later chapters in this book, copyright law protects many other types of works, too, in addition to photographs.• If you commit copyright infringement by publishing someone else’s property on your website, you are exposing yourself to the world. In the past, some people may have been able to get away with copyright infringement because the copyright owner was unaware of what was happening—such as if someone copied photos and used them in a newspaper advertisement in one city. Because the World Wide Web is, as its name implies, available worldwide (except, of course, in those countries where the technology is unavailable or the government forbids it), copyright scofflaws are less likely to go undetected.• If you are a copyright owner, you can successfully sue a cyberspace infringer.• If you are a copyright infringer, you should respond to a demand letter—and take appropriate steps to right your wrong. If you don’t, a copyright lawsuit could prove quite expensive.

Bookclub Guide

A Conversation with Doug Isenberg, author of THE GIGALAW GUIDE TO INTERNET LAWQ: In your experience as an attorney, what are the most common legal issues that come up in relation to the Internet?A: The Internet raises a host of legal issues for anyone who uses it. In particular, every business online must be careful to respect the intellectual property rights of others when creating content for their websites and the technology that powers them. For example, a single website can include trademarks (such as its domain name), copyrights (such as the text and graphics on its pages) and patents (such as software that runs an e-commerce system). Without knowing what these types of legal rights are, a business could make a costly mistake -- either by violating someone else’s rights or by failing to protect its own.Q: Should the average web surfer be concerned with Internet law or are these issues that only hi-tech professionals such as web designers and e-business owners should know about?A: Anyone who uses the Internet needs to know something about Internet law. For example, parents should know that there is a law called the Child Online Privacy Protection Act (COPPA), which forbids websites from collecting certain information about their children. Small businesses need to know about a law called the Anticybersquatting Consumer Protection Act, which makes it illegal to register and use certain domain names. Teachers and librarians should be familiar with laws such as the Child Online Protection Act and the Children’s Internet Protection Act, which restrict the type of material that can be published online and how it can be accessed. And consumers should know about the Digital Millennium Copyright Act, a controversial law that, among other things, creates new criminal penalties for certain types of high-tech copyright infringement. Q: Perhaps the most notorious Internet case involves Napster. Has Napster and its aftermath changed the way information is exchanged and shared online?A: Napster will always be remembered as the company that made digital file sharing simple, but it also will always be remembered as a contributor to massive copyright infringement. Napster disregarded copyright law, and so did its users, who were all too eager to copy music without respect for those who own the intellectual property rights to it. But, Napster will have a lasting effect on the way information is exchanged in a digital environment, because although the courts shut down Napster, they’ll never be able to stop everyone from sharing music, software, e-books, or even movies on the Internet. As a result, publishers, authors, musicians and others must do more than simply use the law to stop copyright infringement in cyberspace; they must find a way to use the technology to their advantage, too.Q: How has the First Amendment been used to defend certain online practices? Do you think Congress and the courts will ever come to an agreement about how to regulate content on the web?A: The role of the First Amendment in cyberspace is very controversial. Indeed, the only two Internet lawsuits to reach the U.S. Supreme Court have involved the First Amendment. In both cases, the courts have found that laws passed by Congress attempting to limit the amount of sexual and similar content on the Internet were unconstitutional because the First Amendment protects the right of free speech.The First Amendment also affects the Internet in many other ways, too. For example, most junk e-mail (spam) is protected by the First Amendment. Critical websites created by dissatisfied customers of a business are often protected by the First Amendment. Even many forms of hate on the Internet -- such as racist or anti-Semitic websites -- are protected by the First Amendment. And certainly, the First Amendment often protects people who express their opinions on online discussion boards. Still, it is frequently difficult to know exactly where the line is drawn between protected (legal) and unprotected (illegal) content on the Internet.Q: Is it illegal to send spam and other junk e-mail? If not, do you think we’ll ever be able to eliminate this annoying practice?A: The United States has no federal law that explicitly outlaws spam. That’s why we all get so much of it! But a number of state legislatures have passed anti-spam laws, as well as some European countries. So far, however, these laws have done little to stem the tide of junk e-mail, in part because most spammers find ways to disguise their identity and avoid the law. Ultimately, the U.S. Congress may pass a federal anti-spam law, but new technologies for avoiding spam may prove to be more useful than any law ever will.Q: What is the best way for attorneys to stay on top of the constantly changing laws that govern the internet and it s use?A: The entire field of "Internet law" is relatively new and therefore constantly evolving. The courts regularly issue important opinions on disputes involving the Internet, and Congress is always debating whether and how to pass new laws to deal with new technology. Lawyers and others who want to understand the fundamentals of Internet law will find a wealth of information in "The GigaLaw Guide to Internet Law," and the best way to keep abreast of new developments is by subscribing to GigaLaw.com Daily News, a free daily e-mail service from GigaLaw.com.

Editorial Reviews

"An excellent introduction for both beginner and expert alike."-Lawrence Lessig, Stanford Law School“I read this book from cover to cover. The examples of case law are of enormous illustrative value. Some of them will raise your blood pressure (well, mine went up several notches, anyway). Well worth the time to read!” —Vint Cerf, chairman, Internet Corporation for Assigned Names and Numbers (ICANN)“Doug Isenberg pulls off the toughest hat trick in legal writing—he and his contributing authors map out the legal landscape of cyberspace in language accessible and friendly to lay readers, providing a comprehensive guide for lawyers who want to gain a quick grasp of cyberlaw, and they do all this with scholarly care for accuracy and precision.” —Mike Godwin, author of Cyber Rights: Defending Free Speech in the Digital Age“A treasure trove of information that is a relief to find, a pleasure to read, and a snap to apply to dozens of your most pressing Internet legal questions.”—Carol Darr, director of the Institute for Politics, Democracy and the Internet“Doug Isenberg is the authority on all issues regarding Internet law. His insight is exceptional, his experience unsurpassed. This book is both a reference work and a bible, enlightening and showing the way—a quintessential, all-encompassing work for both the novice and the veteran.” —Marc Adler, chairman and CEO, Macquarium Intelligent Communications